I NEED A REHAB LOAN FOR A PROPERTY I OWN

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I NEED A REHAB LOAN FOR A PROPERTY I OWN

Joseph Abbott
Tulsa, OK · Member since 2016 · 119 posts · 23 votes

Hello All! I own a property in the Detroit area that I need to rehab and rent. I was looking at the 203k loans, but I figured out that I have to live in the home which I cannot do since I live out of state. Can someone please point me in the right direction? 

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  • Kunal Mishra
    Flipper/Rehabber · Jersey City, NJ · Member since 2016 · 158 posts · 86 votes
    5y

    @Joseph Abbott

    Howe much do you think will be the rehab cost?

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  • Joseph Abbott
    OP
    Tulsa, OK · Member since 2016 · 119 posts · 23 votes
    5y

    Thank you for responding. It'll take $50,000 to rehab the property. Thank you for that information. I will look into that. 

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  • Alex Heidenreich
    Investor · Columbus, OH · Member since 2020 · 55 posts · 64 votes
    5y

    If you have other properties, you can do a cash-out-refinance or take out a HELOC to fund the rehab. This can be a low interest way of doing it.

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  • Joseph Abbott
    OP
    Tulsa, OK · Member since 2016 · 119 posts · 23 votes
    5y

    Thanks Alex. I forgot about the HELOC. I don't have other properties right now.

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  • Keyonte SummersPro Member
    Harper Woods, MI · Member since 2017 · 384 posts · 311 votes
    5y

    What area and whats the ARV? I'm sure the lender would want to make sure the numbers to work. Post all the numbers just incase any private lenders see it as a deal.

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  • John Teachout
    Rental Property Investor · Concord, GA · Member since 2015 · 3k+ posts · 3k+ votes
    5y

    Have you owned the property for a while or is it a new acquisition? If you recently purchased it, what was your plan at the time? ie, how did you expect to get it done?

    And, being in Detroit, how much will it be realistically worth when rehabbed? In some areas, the ARV may be less than the cost of a rehab so make sure you don't throw money down a well.

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  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
    5y

    You may find some challenges finding a lender willing to lend on a Detroit property. So, try Flagstar, Credit Union One or another local bank or credit union.

    Who do you have lined up locally to manage the project?

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  • Whitney HuttenPro Member
    Investor · Boulder, CO · Member since 2016 · 1k+ posts · 1k+ votes
    5y

    @Joseph Abbott For the "fix" part, I would take a look at hard money lenders too. Then refinance out into a conventional loan.

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  • Joseph Abbott
    OP
    Tulsa, OK · Member since 2016 · 119 posts · 23 votes
    5y

    Thanks Whitney. I'm going to look into that!

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  • David M.
    Morris County, NJ · Member since 2020 · 5k+ posts · 2k+ votes
    5y

    @Joseph Abbott

    Sounds a little tough what you have...  Do you own the property free and clear?  I haven't heard of a hard money lender lending on just the rehab, and certainly not in a 2nd position lien.  Can you qualify for a conventional loan?  Otherwise, you don't have an exit strategy since hml are short term, only, technically.

    You might need to find a local bank or credit unit that will basically give you a personal loan.

    How good is your credit/finances?  One "aggressive" way to do it is get 0% intro credit cards.  However, you need to be able to get a conventional loan on that property to pay off those cards otherwise you will obviously be killed in credit card interest.  Maybe think about it if you come up short with other financing options.

    Do you own your own home?  Is there any equity to be drawn out it via a refi with interest rates so low?

    Good luck.

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